Gov. Cuomo releases budget that closes $2 billion gap

Governor Cuomo released a state budget plan that closes a $2 billion dollar gap, recommends a phased in state takeover of county health care costs, and offers an ultimatum to schools to accept a teacher evaluation program or lose increased school funding.

Cuomo closes this year’s budget gap by reducing spending at state agencies by $1.3 billion dollars, and reducing aid to local governments by another $756 million dollars.

The governor proposes merging several state agencies, for example, the Lottery Division and the Racing and Wagering board would form one entity devoted to gambling policy. The Department of Transportation would shrink from 11 regions statewide to just six, while 25 boards and commissions would be eliminated.

Cuomo already agreed to raise taxes on the wealthy back in December to close the rest of the gap, but he says “there are no new or increased fees or taxes” in the budget, no one shot revenue raisers, and in a state long known for complicated budget tricks, he says there are no “surprises” in his spending plan.

“It is not a cracker jack box,” Cuomo said. “You’re not going to find anything in the bottom of it.”

Cuomo does close “loopholes” in the collection of taxes on cigars and loose tobacco, netting an estimated $18 million dollars. Fees for security guard licenses and real estate brokers would be spun up, requiring them to buy licenses that would last twice as long, from two years to four years, but must be paid for in advance, gaining nearly $7 million dollars.

The governor recommends a gradual state takeover of county Medicaid costs in his budget, something the local government leaders had been requesting, saying they could not afford to pay their share of the health care program after Cuomo and the legislature imposed a 2% property tax cap in 2011.

And Cuomo is once again pushing for a new benefit tier for future state employees, that would up the retirement age to 65, end early retirements, and for the first time, offer 401k’s , modeled on the TIAA CREF system which State University employees are already enrolled in.

Assembly Republican Minority Leader Brian Kolb, who backs the budget overall, says Cuomo is likely to get “pushback” from the state worker unions on the pension proposal.

The state’s largest union, the Civil Service Employees Association, in a statement called the new Tier proposal an “assault on the middle class”, and said the governor is “out of touch”.

But perhaps the biggest fight Cuomo will face is over teacher evaluations. Cuomo drew a line in the sand, saying that if schools and teachers do not resolve their differences over the long stalled teacher evaluation program within 30 days, he’ll enact his own evaluation system. If schools don’t comply the governor will withhold a 4% increase in school funding promised for this year. Cuomo says as much as one billion dollars in federal funding is in jeopardy because of the failure so far of the teacher evaluation system.

The governor is also asking for the state’s largest teachers union and the state education department to drop a lawsuit over the teacher evaluation has that has further delayed things.

“If they can’t do it, we’ll do it for them,” Cuomo said.

Assembly Speaker Sheldon Silver, who has close ties to the teachers union, says the governor’s ultimatum is “on target” .

“From our perspective we lose funding, we lose jobs,” said Silver. “I think you will, as a result of that, see a lot of agreements across the state.”

The Speaker overall was non committal, saying he needs to see the details of all of the governor’s proposals before he can draw any conclusions.

Cuomo is getting some criticism for $300 million dollars in spending cuts to social service programs. Michael Kink, with the Strong Economy for All coalition, says he’s disappointed with the governor’s plans to also delay an increase in the welfare grant.

“We have extraordinarily high rates of poverty in the state right now ,” sad Kink. “It may be a time to do a little more for the bottom one percent.”

Kink says he does like the governors’ job creation programs- the biggest one would use over one and half billion state dollars to leverage billions more in investments for road and bridge and other infrastructure repairs, including a new Tappan Zee Bridge, better flood control, and renewable energy systems.

The governor keeps spending for the Environmental Protection Fund even at $134 billion dollars, and does not recommend any more staff at the Department of Environmental Conservation to regulate hydrofracking. He’s said previously that since fracking has not yet been approved, there’s no reason yet to hire more monitors.

And , for the first time in three years, the state police will be hiring again. Cuomo has allocated money to recruit and train up to 230 new troopers.